Wheat futures continued their downward trend on Tuesday, with CBT wheat testing below $5, following Monday's losses across all major markets. This decline occurs as USDA data shows winter wheat harvest near normal pace and spring wheat lagging slightly, alongside increased open interest. Despite the price pressure, weekly export shipments, while down from the prior week, are up year-over-year, and marketing year-to-date exports remain above last year's levels, suggesting underlying demand.
The wheat market is exhibiting clear bearish momentum, with nearby Chicago Board of Trade (CBT) futures testing the significant psychological price level below $5.00. This downward pressure is reinforced by an increase in preliminary open interest of 6,485 contracts, suggesting new short positions are being established. On the supply side, the U.S. winter wheat harvest is 94% complete, nearly aligned with the 95% five-year average, indicating a predictable and ample supply flow. While the spring wheat harvest is on pace with its average at 36% complete, a minor 1% improvement in good-to-excellent conditions to 50% further alleviates supply concerns. In contrast, demand signals show underlying resilience; while weekly export shipments of 395,240 MT were down 4.73% from the prior week, they were up 5.59% year-over-year. More significantly, total marketing year exports are 3.69% ahead of last year's pace at 4.811 MMT, indicating that current price weakness is occurring despite firm international demand from key importers like Mexico, Japan, and Egypt.
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moderately negative
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